Friday marked the closing of Natura's acquisition of Avon, making the Brazilian-based group the fourth-largest pure-play beauty company in the world.
Now at the helm of the holding company that oversees both businesses, Natura & Co Holding SA — owned 76 percent by Natura shareholders and 24 percent by Avon shareholders — is Roberto Marques, who was named group chief executive officer following the completion of the deal.
Marques joined Natura four years ago as executive chairman and spearheaded its acquisition of The Body Shop. Now he's tasked with running one of the largest beauty behemoths in the world. Natura & Co's four brands — Natura, Avon, Aesop and The Body Shop — together would have generated about $9.3 billion in net sales for 2018, tracking only behind L’Oréal SA, the Estée Lauder Cos. Inc. and Shiseido Co.
With the new organization, each of the individual brand ceo's are to report into Marques. Also revealed Friday was the resignation of Avon ceo Jan Zijderveld, who is to be succeeded by Avon veteran Angela Cretu.
Avon has struggled for years, but Marques aims to apply learnings from the digitization of Natura's representative-based business and The Body Shop's recent turnaround, which is said to be showing signs of improvement, under a new organization that focuses on information and best practice sharing between each brand.
What ties Natura's brands together is a commitment to bettering the world, said Marques, which he is hopeful will translate as relevance to young consumers who are looking to shop with brands that stand for something. It's nice to be one of the biggest beauty companies in the world but most importantly, said Marques, "the size enables us to be a bigger voice, a louder voice."
WWD sat down with Marques following the close of the deal, and talked about the ceo shakeup, what's next for the Avon business and direct-selling's renaissance.
WWD: The latest news to come out of the Natura-Avon deal is a ceo shakeup. What was the impetus for stepping down?
Roberto Marques.: We have four ceo's at the business level. At Avon, we've named Angela . It brings somebody who represents a lot of the values of Avon, who had been there 20 years and who connected very much with the representatives and had a very strong track record. It's a great message to the Avon associates and representatives — that we believe so much in Avon and what Avon brings to the group.
Jan played a very important role during the transition…setting that strategy that we believe in. We're very bullish about "Open Up Avon" and the pillars — we want to make sure we continue that. Jan felt at this point it would be better for him to step down, and I worked with him to find his replacement.
WWD: What's next for the Avon business?
R.M.: We firmly believe that the direction is correct. When we talk about Open Up Avon, digitization — rebooting the direct-selling into social selling and networking, opening channels for consumers to buy products. What will enable us to accelerate that is Natura, which to some extent has been doing this and has been ahead of the curve for a period of time in…digitization. If you look at the commercial models and how we've segmented the consultants at Natura, it's something that can be applicable to Avon. There's going to be a lot of cross-sharing — a lot of things that Avon can learn from Natura and Natura can learn from Avon. We think this combination will accelerate without changing direction.
WWD: What are some of the lessons you think Avon and Natura can learn from each other?
R.M.: Where Natura can help Avon is with the commercial model and digitization. What Avon will be able to help Natura with is the global footprint, international expertise. Natura is in Brazil and six countries in Latin America — this allows us to be more bullish to expand the Natura brand in more geographies. The other thing is that Avon has a much deeper household penetration than any of our brands because it is more mass. It enables us to reach more households globally and in Brazil and Latin America. If we're smart about this cross-selling and up-selling, that in my mind is the than .
WWD: Avon's sales are still not great. Where are you in the Open Up Avon process?
R.M.: I would credit Jan and the team made great strides on improving efficiency, improving margins, pricing — you can see the productivity of the representatives has improved, the margins of the business have improved. They are on a journey of digitization of the commercial model. At Avon, it's not one size fits all — region has a singularity that needs to be understood and thoughtfully analyzed.
There's this sense of a renaissance in direct-selling. We see companies hiring very famous people, influencers . We have 6 million potential influencers globally . It used to be an off-line relationship and now it's becoming online and offline networking, where the consultants are becoming microinfluencers, people who are entrepreneurs and can have an impact on their own society and neighborhood. They can become influencers in their own community.
WWD: How do you support representatives who are trying to become more digital and social-media savvy?
R.M.: We have a lot of training on how to capacitate these entrepreneurs to become digitally savvy. There's a social element of inclusion and a business element of becoming more successful, and both Avon and Natura have programs that can be optimized by working together.
One example is that both Natura and Avon created a card to give to consultants so they can actually have a bank account to charge consumers with. A lot of these consultants before didn't have a bank account. It's a social element of inclusion — they couldn't even take an Uber . By providing those financial elements, they can become more connected and do business better and their lives can become more complete.
WWD: One part of Open Up Avon was focusing on product innovation. Where are you with that?
R.M.: We are very focused on product development, the core capability for us at Natura and Avon. We think there are opportunities to collaborate within the group. We want to capitalize on what Natura does well in Brazil and what Avon does well in Suffern and help eventually bring that to The Body Shop and Aesop.
We're organizing networks of excellence — we're creating cross-business groups that work together to maximize opportunities across the different businesses. We created ones for sustainability, digitization and retail and very recently we created one for innovation and product development. We think it will be critical with Avon coming into the group. We know Avon has very strong product development expertise in skin care and makeup, and Natura has a very strong capability in fragrance and body care. Can we maximize these for the group? It won't happen overnight, but it's clearly an opportunity?
WWD: The big question here is what is your strategic vision for driving the core businesses going forward?
R.M.: We have three things that make us very unique. The first thing is probably what makes people come to work every day and the reason why I think we can be extremely relevant — this notion that we are purpose-driven at heart. Each of our four brands was founded with this notion that business should serve a bigger purpose. If you look at the history of Anita Roddick , the history of Avon, the history of Aesop and the history of Natura, they were all founded with the same core principle that business needs to serve a higher purpose. This purpose gets expressed in women in power, the women entrepreneurs we have as consultants, fighting against climate crisis, non-animal testing, campaigns against domestic violence and breast cancer, sourcing ingredients in a sustainable way and working with local communities, all those values are common values that make the group very special. Our purpose talks about the nurturing beauty and relationships for a better way of living and doing business, and that's what we believe in.
The second is this notion of direct-to-consumer. We reach more than 200 million consumers almost on a daily basis without any intermediates. This notion of relationship, where, I know you, I know your preference, I can get your insight on how we can develop new products and solutions, is very powerful. That gets expressed through consultants, stores and digital business. We're the only beauty company, I think, that can claim a true direct-to-consumer business. We want to continue this notion and amplify that.
The third notion is how we operate — we are very entrepreneurial here, we're empowered to make decisions. We have four ceo's really driving the business and creating interdependence through the . We aspire to become not just the best beauty company in the world but for the world and we're uniquely positioned to actually achieve that.
WWD: You're certainly now one of the biggest.
R.M.: I'm going to quote Anita Roddick — "The world doesn't need another big company." It really doesn't. We think the size is going to help us amplify the message we believe is relevant. What both boards got excited about is this combination and just that we're going to become the number four beauty company in the world, but our ability to transform lives, to impact society, to be a louder voice in the fight against climate crisis, to be able to provide different financial services to entrepreneurs to become more successful.
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